Wednesday, January 31, 2018
The Washington Post ran an article looking at the longer-term impact of the increasing costs of health care on any COLAs from SSA. Out-of-pocket health-care costs likely to take half of Social Security income by 2030, analysis shows discusses a recent Kaiser Family Foundation which "found out-of-pocket health-care costs for Medicare beneficiaries are likely to take up half of their average Social Security income by 2030." The KFF report, Medicare Beneficiaries’ Out-of-Pocket Health Care Spending as a Share of Income Now and Projections for the Future was published January 26, 2018. Here is the executive summary
Medicare helps pay for the health care needs of 59 million people, including adults ages 65 and over and younger adults with permanent disabilities. Even so, many people on Medicare incur relatively high out-of-pocket costs for their health care, including premiums, deductibles, cost sharing for Medicare-covered services, as well as spending on services not covered by Medicare, such as long-term services and supports and dental care. The financial burden of health care can be especially large for some beneficiaries, particularly those with modest incomes and significant medical needs. Understanding the magnitude of beneficiaries’ current spending burden, and the extent to which it can be expected to grow over time, relative to income, provides useful context for assessing the implications of potential changes to Medicare or Medicaid that could shift additional costs onto older adults and younger people with Medicare.
In this report, we assess the current and projected out-of-pocket health care spending burden among Medicare beneficiaries using two approaches. First, we analyze average total per capita out-of-pocket health care spending as a share of average per capita Social Security income, building upon the analysis conducted annually by the Medicare Trustees. Second, we estimate the median ratio of total per capita out-of-pocket spending to per capita total income, an approach that addresses the distortion of average estimates by outlier values for spending and income. Under both approaches, we use a broad measure of Medicare beneficiaries’ total out-of-pocket spending that includes spending on health insurance premiums, cost sharing for Medicare-covered services, and costs for services not covered by Medicare, such as dental and long-term care. We present estimates of the out-of-pocket spending burden for Medicare beneficiaries overall, and by demographic, socioeconomic, and health status measures, for 2013 and projections for 2030, in constant 2016 dollars.
A pdf of the report is available here.
Wednesday, January 24, 2018
The Social Security Advisory Board recently released a report, Improving Social Security's Representative Payee Program, January 2018. Here is the summary of the report:
More than two years ago, the Social Security Advisory Board (board) committed itself to exploring how to strengthen the representative payee (rep payee) program of the Social Security Administration (SSA), which serves more than eight million vulnerable beneficiaries/recipients. This paper summarizes the board’s recommendations for both immediate changes by SSA and a plan for broader government-wide action. The board found broad interest in improving SSA’s rep payee program and reached bipartisan agreement on how to do so.
The report provides short-term recommendations to SSA and Congress which the board believes will strengthen the current administrative process and create a more manageable monitoring role. The board also advocates for the Office of Management and Budget to pursue long-term structural changes which will involve comprehensive government-wide coordination efforts and cross-agency reforms.
This report is organized into five parts. Part I highlights the size and expected growth of SSA’s rep payee program. Part II examines the processes for determining the need for and the selection of rep payees. Part III provides an overview of SSA’s program monitoring. Part IV discusses the need for inter-agency collaboration. Part V lists all the board’s recommendations discussed and contained within each of the aforementioned sections. The appendices of the report provide a brief history of the rep payee program, a summary of the National Academies study on financial capability, an overview of the board’s work on rep payee issues and of the board’s 2017 forum on rep payees, and a description of an online chart collection that accompanies the report.
The 46 page report, available for download as a pdf here. The report is divided into 5 parts: (1) the projected demand for the rep payee program; (2) the way SSA determines if a beneficiary needs a rep payee, (3) SSA's monitoring of the program, (4) inter-agency collaboration, and (5) the Board's recommendations.
Check it out!
Friday, December 15, 2017
Are you familiar with the National Center on Law and Elder Rights? If you are an academic teaching courses about any aspect of elder law, disability law, Medicare or Medicaid, you will want to know more about this resource. If you are working in a legal services organization that represents older clients or disabled adult clients, you will want to now about this resource. If you are a young lawyer and just handling your first case involving home-based or facility-based care for older persons who are can't afford private pay options, you will definitely want to know about this resource. In fact, if you are a long-time lawyer representing families who are struggling to find their way through an "elder care" scenario, you too might benefit from an educational "tune up" on available benefits. And the very good news? This is a free resource.
The National Center on Law and Elder Rights (NCLER) was established in 2016 by the federal Administration for Community Living. The new entity is, in essence, a partnership project, with the goal of providing a "one-stop resource for law and aging network professionals" who serve older adults who need economic and social care assistance. Justice in Aging (formerly the National Senior Citizens Law Center) which has primary offices on the east and west coast is a key partner, working with the American Bar Association's Commission on Law and Aging, the National Consumer Law Center (NCLC), and the Center for Social Gerontology (TCSG). Attorneys at these four NCLER partners provide substantive expertise, including preparation of materials available in a variety of formats, such as free webinars on a host of hot topics. The Directing Attorney is Jennifer Goldberg from Justice in Aging and the Project Manager is attorney Fay Gordon.
It strikes me that a very unique way in which NCLER will be a valuable resource is through what the offer as "case consultations" for attorneys and other professionals. Think about that -- you may have long-experience with one branch of "elder law" such as Medicaid applications, but you have never before handled an elder abuse case with a bankruptcy problem. Here is the way to potentially get experienced guidance!
The web platform for NCLER offers a deep menu of resources, including recordings of very recent webinars and information on future events. I recently signed up for a January 2018 webinar program on elder financial exploitation and even though it is a "basics" session I can tell I'll hear about a new tools and possible remedies, as the presenters are Charlie Sabatino and David Godfrey. I just watched a recording of another recent webinar and it was very clear and packed with useful information. There is a regular schedule for training sessions -- with "basics" on the second Tuesday of every month and more advanced training sessions on the third Wednesday every month.
I confess that somehow NCLER wasn't on my radar screen until recently (probably because my sabbatical last year put me about a year behind on emails -- seriously!) but I'm excited to know about it now.
December 15, 2017 in Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Federal Cases, Health Care/Long Term Care, Legal Practice/Practice Management, Medicaid, Medicare, Programs/CLEs, Social Security, Web/Tech, Webinars | Permalink | Comments (0)
Sunday, October 15, 2017
That's similar to the title of a news story on Kaiser Health News Social Security Giveth, Medical Costs Taketh Away, reporting on the amount of Social Security is spent by beneficiaries on out of pocket hospital costs. On Friday SSA announced its 2018 figures, including the COLA increase. However, Medicare's 2018 premium amounts haven't yet been announced, but speculation is that the premium raises will wipe out the COLA increase. The Washington Post reported Social Security checks to rise 2 percent in 2018, the biggest increase in years reports a 2% increase in Social Security for 2018 and noted that "[h]ealth care is their biggest expense, and it's one of the fastest rising costs in America. Medicare Part B premiums are expected to rise in 2018, eating up much of the Social Security increase for some seniors." Forbes reported similarly in its article, Gotcha! Social Security Benefits Rising 2% In 2018, But Most Retirees Won't See Extra Cash, "many recipients will find most or all of that increase eaten up by a jump in the Medicare Part B premiums deducted from their monthly Social Security checks...."
The Forbes article explains why beneficiaries won't really come out ahead with the COLA increase.
By law, normal Part B premiums are supposed to cover 25% of Medicare's costs for providing doctor and outpatient services. But about 70% of Social Security recipients have been protected in the past two years by a “hold harmless” provision which provides no increase in Medicare premiums can reduce a Social Security recipient's net monthly check below what it was in the previous year. (Recipients who are considered “high income” and those who don’t have their premiums deducted from Social Security aren’t protected by this hold harmless provision.) Since retirees got no Social Security increase in 2016 and a measly 0.3% hike in 2017, the 70% are now paying an average of $109 a month, instead of the $134 per month premium that would be needed to cover 25% of costs.
While Medicare Part B premiums for 2018 haven’t yet been announced, they’re expected to remain at around $134----meaning the 70% will see about $25 per person---or $50 per couple---of any Social Security benefits increase consumed by higher Medicare premiums.
With open enrollment starting, expect the 2018 premiums to be announced.
Thursday, September 28, 2017
On Tuesday, September 26, 2017, at the same time that there was much sound and fury, but no vote, on the Graham-Cassidy Senate effort to repeal Obamacare, the U.S. Senate quietly approved on a voice vote Senate Bill 870, titled "Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act of 2017"or "CHRONIC Care" for short.
The vote sends the bill on to the House for any next step of action. In press releases after the vote, sponsors welcomed Senate passage as a sign of bipartisan support for "strengthening and improving health outcomes for Medicare beneficiaries living with chronic conditions," noting:
“This bill marks an important step towards updating and strengthening Medicare’s guarantee of comprehensive health benefits for seniors,” said [Oregon's Senator Ron Wyden,] the ranking Democrat on the Senate Finance Committee. “Medicare policy cannot stand idly by while the needs of people in the program shift to managing multiple costly chronic diseases,” Wyden said. “This bill provides new options and tools for seniors and their doctors to coordinate care and makes it less burdensome to stay healthy.”
The bill that passed the Senate on Tuesday was co-sponsored by Senate Finance Committee Chairman Orrin Hatch (R-Utah), as well as Sens. Johnny Isakson (R-Ga.) and Mark Warner (D-Va.)
Initial review of the modestly ambitious bill shows that if passed in full by the House, the legislation would extend by 2 years the "Independence at Home Demonstration program," now in its 5th year, with funding otherwise set to run out at the end of September. Additional provisions address "telehealth" services and direct studies or accounting reports on Medicare Advantage plans.
The Independence at Home Demonstration program seems worthy of additional operation and tracking, as at least on paper it trends towards what most people seem to want, i.e., better health care access while still at home, rather than waiting for facility-based services. For more on preliminary outcomes from the Demonstration program, see "Corrected Performance Results" from Year 2, released in January 2017.
On the other hand, it is difficult to resist the irony that a great deal of work seemed to go into crafting the acronym, "CHRONIC," which also happens to be the street name for "very high-quality marijuana."
My special thanks to my newest Dickinson Law colleague, Professor Matthew Lawrence, who comes to us with fabulous experience in health care law, for helping identify this active piece of legislation.
Monday, September 25, 2017
Video: Elder Law Attorney Uses Her Experiences to Explain Why Graham-Cassidy Repeal of ACA Isn't Right Answer
In a 3-minute YouTube video, Texas Elder Law Attorney Jennifer Coulter explains how the Affordable Care Act has affected her clients -- and herself -- in a positive way. She makes a principled, compelling case for why "getting it right" on health care is far more important than political sound bites and rushed repeal measures.
Thursday, September 14, 2017
How well-prepared are you for financing your retirement? Do you know your family's finances? The New York Times examined the situations that may be faced by women who are older who are not involved in the handling of their family's finances. Helping Women Over 50 Face Their Financial Fears covers a lecture series, Women and Wills, designed specifically for women over 50 that cover a variety of topics, including estate planning. health care, insurance, long term care, business succession planning and more. The founders are well aware that some women may not be up to speed on their family's finances, or other circumstances such as a spouse's illness, may present challenges for them. The founders plan to take their lecture series on the road, nationwide, and publish a book on the importance of planning.
Thanks to Professor Naomi Cahn for sending a link to the article.
Monday, August 28, 2017
The Consumer Financial Protection Bureau has released three resources on reverse mortgages:
1. https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201708_cfpb_costs-and-risks-of-using-reverse-mortgage-to-delay-collecting-ss.pdf on using a reverse mortgage to delay taking SSA retirement. The issue brief, The costs and risks of using a reverse mortgage to delay collecting Social Security runs 27 pages and is downloadable as a pdf. As the conclusion explains
We find that borrowing a reverse mortgage loan to get an increased Social Security benefit carries significant costs that generally exceed the additional lifetime amount gained from delaying Social Security. In addition, the amount that a consumer will need to borrow from a reverse mortgage loan to delay claiming Social Security benefits could negatively affect the consumer’s ability to move or use their home equity to meet a large expense later in life.
For consumers who have the option, working past age 62 is usually a less costly way to increase their monthly Social Security benefit than borrowing from a reverse mortgage.40 The extra years of work often provide people more time to save for retirement and pay off debts. The extra years of work may also result in an increase in Social Security benefits—separate from the increase that arises from deferring the start of benefits—by replacing years with low or no earnings from the person’s earnings record.41 Consumers may also consider other options to increase their Social Security benefit, such as coordinating their claiming decision with their spouses.
As consumers consider borrowing a reverse mortgage loan in order to delay claiming Social Security benefits or defer withdrawing funds from retirement savings, it is important for them to be aware of the risks and costs associated with this strategy. This is especially true for consumers whose primary source of income is Social Security and whose main asset is their home. For those consumers, the costs of a reverse mortgage loan will likely exceed the lifetime amount of money gained from an increased Social Security benefit, which in turn may threaten their financial security later in life.
The second resource is a discussion guide on reverse mortgages a twenty-four page pdf that provides "an overview of many key concepts of reverse mortgages." The guide is organized by the requirements for a reverse mortgage and includes illustrations and graphics for each. This is a very helpful tool!
The agency's blog also discusses this new resources. Add these to your collection of resources!
Monday, August 14, 2017
The ABA Journal this month has a short piece especially relevant today, August 14, 2017. Today is the 82nd anniversary of the signing of the Social Security Act in 1935. Frances Perkins is highlighted in the article as "The Woman Behind America's Social Safety Net."
By late 1934, Roosevelt was facing conservative resistance to his New Deal programs in Congress and the courts. Moreover, it would take years before those who had immediate needs would see any benefit from the social security [Secretary of Labor Frances] Perkins favored. Roosevelt confided to others that the timing might not be right for old-age insurance.
Perkins was furious and confronted him, arguing that the nation’s dire condition might provide the political opportunity for a bold initiative. When Roosevelt gave her a Christmas deadline, Perkins invited the committee to her home, placed a bottle of scotch on a parlor table, and told them they were not to leave until they had framed a legislative proposal....
Okay -- admit it -- how many of us first came to know the name of Frances Perkins in the movie Dirty Dancing?
Sunday, August 6, 2017
Mark your calendars for August 16, 2017 at 2:00 p.m. edt for a free webinar from Justice in Aging on In-Kind Support & Maintenance (ISM). Here's a description of the webinar:
Why do many clients receiving Supplemental Security Income (SSI) benefits only receive $490 each month instead of $735, and what can we do about it? In many cases, the reason is “in-kind support and maintenance” (ISM). A person who receives shelter and food from a friend or family member they live with is receiving in-kind support and maintenance. The Social Security Administration (SSA) counts that support as income and lowers their benefit. The ISM rule is unique to the SSI program, and causes a lot of confusion for recipients, advocates, and SSA. This free webinar, In-Kind Support and Maintenance, will explore the ins and outs of ISM, provide examples of how the rule works, and offer strategies for dealing with the rule. As SSI is a means-tested program, applicants and recipients must meet several financial eligibility criteria on an ongoing basis. The income and resources rules, including “in-kind support and maintenance,” are particularly complicated. These rules can cause significant hardship for low-income people trying to survive on SSI. Giving advocates the tools to successfully navigate the rules on behalf of their clients can make a big difference. The recipient in the example above could have an additional $245 per month for necessities like health care expenses, household expenses, transportation, and other basic needs.
To register for this webinar, click here.
Friday, July 21, 2017
In the latest chapter of an ongoing dispute between a specialized care facility, Melmark, Inc., and the older parents of a disabled adult son, Pennsylvania's intermediate Superior Court of Appeals has ruled in favor of the parents.
The July 19, 2017 appellate decision in Melmark v. Schutt is based on choice of law principles, analyzing whether New Jersey's more limited filial support law or Pennsylvania's broader filial law controlled. If applied, New Jersey law "would shield the [parents] from financial responsibility for [their son's] care because they are over age 55 and Alex is no longer a minor." By contrast, "Pennsylvania's filial support law...would provide no age-based exception to parental responsibility to pay for care rendered to an indigent adult child."
The parents and the son were all, as stipulated to the court, residents of New Jersey. New Jersey public funding paid from the son's specialized care needs at Melmark's Pennsylvania facility for some 11 years. However, when, as part of a "bring our children home" program, New Jersey cut the funding for cross-border placements, the parents, age 70 and 71 year old, opposed return of their 31-year old son, arguing lack of an appropriate placement. Eventually Melmark returned their son to New Jersey against the parents' wishes, with an outstanding bill for unpaid care totaling more than $205,000, incurred over his final 14 months at Melmark.
Both the Pennsylvania trial and appellate courts ruled against the facility, concluding that "the New Jersey statutory scheme reflects a legislative purpose to protect its elderly parents from financial liability associated with the provision of care for their public assistance-eligible indigent children under the present circumstances." The courts rejected application of Pennsylvania's law as controlling.
This is a tough case, with hard-line positions on the law staked out by both sides. One cannot expect facilities to provide quality care for free. On the other side, one can empathize with families who face limited local care choices and huge costs.
Ultimately, I anticipate these kinds of cross-border "family care and cost" disputes becoming more common in the future for care-dependent family members, as the impact of federal funding cuts trickle down to states with uneven resources of their own. Some of these problems won't see the courtroom, as facilities will likely resist any out-of-state placement where payment is not guaranteed by family members, old or young.
July 21, 2017 in Consumer Information, Estates and Trusts, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Housing, Medicaid, Social Security, State Cases, State Statutes/Regulations | Permalink | Comments (0)
Monday, July 17, 2017
The SSA Trustees released the 2017 annual report on July 13, 2017. You can download the 269 page report as a pdf here or you can contact the Office of the Chief Actuary for a hard cc of the report. There is a lot of information in this report, but of course, what everyone wants to know is whether Social Security is running out of money. Section II, the Highlights, offers this conclusion
Under the intermediate assumptions, DI Trust Fund asset reserves are projected to become depleted in 2028, at which time continuing income to the DI Trust Fund would be sufficient to pay 93 percent of DI scheduled benefits. Therefore, legislative action is needed to address the DI program’s financial imbalance. The OASI Trust Fund reserves are projected to become depleted in 2035, at which time OASI income would be sufficient to pay 75 percent of OASI scheduled benefits.
The Trustees also project that annual cost for the OASDI program will exceed non-interest income throughout the projection period, and will exceed total income beginning in 2022 under the intermediate assumptions. The projected hypothetical combined OASI and DI Trust Fund asset reserves increase through 2021, begin to decline in 2022, and become depleted and unable to pay scheduled benefits in full on a timely basis in 2034. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 77 percent of scheduled benefits. Lawmakers have a broad continuum of policy options that would close or reduce Social Security's long-term financing shortfall. Cost estimates for many such policy options are available at www.ssa.gov/OACT/solvency/provisions/.
The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust to them. Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits and could preserve more trust fund reserves to help finance future benefits. Social Security will play a critical role in the lives of 62 million beneficiaries and 173 million covered workers and their families in 2017. With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations.
Thursday, June 15, 2017
When thinking about Social Security for retirement purposes, we know that recipients can be confused about when to draw benefits. But it may also be unclear what type of benefits are available for certain beneficiaries. So Kiplinger's Social Security quiz is a quick and easy way to test your Social Security knowledge. The 10 multiple choice questions covers topics such as early retirement, spousal benefits, the effect of divorce, dependent benefits, the trust fund and the future of Social Security. Check it out!
Tuesday, June 6, 2017
Our exclusive Retirement Savings Calculator will help you estimate the future value of your retirement savings and determine how much more you need to save each month to reach your retirement goal. Actual results will depend on how much you contribute to your retirement accounts, the rate-of-return on your investments, and how long you live. (The calculator does not take taxes on your retirement income into account so your actual spendable income will be less.)
Try it out. It really is quick and easy. It would be a great tool to use with our students to get them thinking about financial security and the importance of planning for retirement.!
Thursday, May 18, 2017
Social Security is a popular social insurance program administered by the Social Security Administration. It provides critical resources and economic security to many workers who are retired or have a disability, as well as to their survivors and dependents. This webinar is designed for legal services and other advocates who are just getting started in the field and others who want to learn more about the essentials of the program. This Legal Basics: Social Security webinar will cover the basics of the Social Security program and the rules surrounding it, including general information on how the program works and who is eligible to claim benefits (including spouses and children). We will also discuss other basic information such as timing considerations when applying for benefits, how benefits are calculated, and suggestions on where to find further information.
To register for this free webinar, click here.
Friday, May 12, 2017
On May 10, 2017, my research colleagues Gavin Davidson (Queens University Belfast) and Subhajit Basu (University of Leeds) participated in a policy briefing at Stormont, the Northern Ireland Assembly in Belfast. They appeared in support of recommendations by the Commissioner of Older People (COPNI) Eddie Lynch on a major plan for modernization of social care programs for vulnerable adults (of any age).
Professors Davidson and Basu focused on three key recommendations:
- Northern Ireland should have a single legislative framework for adult social care with accompanying guidance for implementation. This could either be new or consolidated legislation, based on human rights principles, bringing existing social care law together into one coherent framework.
- All older people in Northern Ireland, once they reach the age of 75 years, should be offered a Support Visit by an appropriately trained professional. This will be based on principles of choice and self-determination and is aimed at helping older people to be aware of the support and preventative services that are available to them.
- Increasing demands for health and social care reinforce the importance of considering how these services should be funded. All future funding arrangements must be equitable and not discriminate against any group who may have higher levels of need.
The audience, which included researchers, social service program administrators and elected officials (not only from Northern Ireland, but elsewhere, including the Isle of Man), reportedly responded strongly to the recommendations, especially to the concept of specially-trained "support visitors," offered to persons age 75 or older. The intent is to provide individuals with planning support and, where needed, medical assessment. Guidance and information is often needed for pre-crisis planning, thus moving in the direction of prevention of crises and reduction of need for last-minute response. The support visitor concept has been used successfully in Denmark and other locations in Europe. The next step for Northern Ireland would likely be a pilot or test project.
As a co-author of the research reports that led to the COPNI recommendations, working with Professors Gavin Davidson and Subhajit Basu as part of a team headed by Dr. Joe Duffy of Queens University Belfast, I found it an interesting coincidence that at almost the same time as the Northern Ireland government session, I was addressing similar interests in "preventative" planning while speaking on elder abuse in a "Day on the Hill" program at the Capitol in Pennsylvania, hosted by the Alzheimer's Association. It is clear that on both sides of the Atlantic, we are interested in cost-effective, proactive measures to help people stay in their homes safely.
Wednesday, May 10, 2017
Writing for the Institute for Family Studies, George Washington Law Professor Naomi Cahn and University of Minnesota Law Professor June Carbone dig into the black and white of statistics on "gray" divorce, with interesting observations. For example:
First, some good news for everyone: the divorce rate is still not all that high for those over the age of 50. Yes, it has doubled over the past 30 years: in 1990, five out of every 1,000 married people divorced, and in 2010, it was 10 out of every 1,000 married people. And yes, the rate has risen much more dramatically for gray Americans than for those under 50; in fact, there was a decline in the rate for those between the ages of 25-39. But the divorce rate for those over 50 is still half the rate for those under 50.
Divorce for older individuals often does have significant impacts for individuals in retirement, as they point out:
These statistics don’t mean that gray divorce isn’t a problem. Those who divorce at older ages, like those who divorce at younger ages, tend to have less wealth than those who remain married, with the gray divorced having only one-fifth of the assets of gray married couples. Compared to married couples, gray divorced women have relatively low Social Security benefits and relatively high poverty rates. While gray married, remarried, and cohabiting couples have poverty rates of four percent or less, 11 percent of men who divorced after the age of 50 were in poverty, and 27 percent of the women were in poverty.
For more, read "Who is at Risk for a Gray Divorce? It Depends."
Sunday, April 23, 2017
Justice in Aging has released a new fact sheet, New Guidance from SSA on Spousal & Survivors Benefits for Married LGBT Individuals. "On March 1, 2017, the Social Security Administration (SSA) announced it would reopen any decision to deny spousal or survivors benefits to a same-sex spouse based on a discriminatory marriage ban, which resulted in a loss of benefits to the individual who filed the claim." The fact sheet notes an SSA ruling and POMS. "This policy change applies to applications for spousal or survivors benefits that SSA denied prior to the Windsor and Obergefell decisions because it did not recognize their marriages. Even those who began receiving SSA benefits following the Supreme Court decisions may be due retroactive benefits for the period between when they first applied (and were denied) and when SSA finally recognized their marriage." The fact sheet also explains who is not affected as well as who might be. The fact sheet concludes explaining that SSA is in the process of reaching out to 800 beneficiaries whose benefits were denied to tell them their applications are being reopened.
Click here to read the full fact sheet.
Wednesday, March 8, 2017
The teachers' pension fund in Puerto Rico is the latest example of an under-funded government-operated retirement plan. A unique complication of the Puerto Rico teachers' plan is the decision to opt out of Social Security as a separate form of retirement income. In a recent New York Times article, the reporter makes the the analogy to a Ponzi scheme:
Puerto Rico, where the money to pay teachers’ pensions is expected to run out next year, has become a particularly extreme example of a problem facing states including Illinois, New Jersey and Pennsylvania: As teachers’ pension costs keep rising, young teachers are being squeezed — sometimes hard. One study found that more than three-fourths of all American teachers hired at age 25 will end up paying more into pension plans than they ever get back.
“I think they’re really being taken advantage of,” said Richard W. Johnson of the Urban Institute, a co-author of the research. “What’s so tragic about this is, often the new hires aren’t aware that they’re getting such a bad deal.”
The problem is magnified by the fact that the Puerto Rico teachers union — like many teachers and police unions around the country — opted out of Social Security long ago, hoping it could save both workers and the government money by not paying Social Security taxes.
That decision was predicated on the assurance that the workers’ pensions would be well managed and adequately funded. But in Puerto Rico, as in some other places, that has not been true for decades.
For more, read In Puerto Rico, Teachers' Pension Fund Works Like a Ponzi Scheme.
Monday, February 27, 2017
The Washington Post ran a recent story about saving for retirement. Two-thirds of Americans aren’t using this easy way to save for retirement stress the importance of workers taking advantage of various workplace retirement accounts yet many fail to do so.
Fewer than one-third of Americans are saving money in their 401(k)s and other workplace retirement accounts, according to an analysis of tax records by Census Bureau researchers.
Although nearly 80 percent of Americans work for an employer that offers retirement programs — whether a 401(k), 403(b) or something else — only 32 percent of workers sign up for such accounts, according to a working draft of the study by Michael Gideon and Joshua Mitchell. The researchers studied W-2 tax forms from 2012 from 155 million American workers for their findings, which help shed light on just how ill-prepared many Americans are for the future.
The article discusses the importance of saving for retirement for the various age groups and notes that it's unlikely that those close to retirement have a realistic idea of what it costs to live during retirement.
Older workers ... are increasingly experiencing sticker shock when they realize just how much money they’ll need for retirement, said Manisha Thakor, a financial adviser in Portland, Ore. The most conservative calculations estimate Americans will need to have about eight to 10 times their annual salary saved for retirement, she said.
“By the time people see how much they need, it seems so horrific and out of bounds that they just freeze and do nothing,” she said, adding that she counsels clients to save at least 20 percent of their income toward retirement and other expenses. “They just throw their hands up and say, ‘What’s the point of even trying at this point? I’m so far off.’ ”
At the same time, people are living longer, which means they’ll have to save up that much more to help support themselves in their post-work years. She added, “Layered on top of both generations is the specter of student loan debt, which has now eclipsed credit card debt.”
The student debt referenced in the article is that taken on for their kids or grandkids.
What is the way to get more workers to take advantage of the offered workplace retirement plans? One idea in the article is automatic enrollment. Even though that may be successful, don't forget, "[i]n recent weeks ... Congress has moved to repeal Obama administration measures that allow states to automatically enroll workers ii retirement programs."